Part 16Companies with investment business
Chapter 2Management expenses
Relief for expenses of management
1220Meaning of “unallowable purpose”
1
For the purposes of section 1219, investments are held for an unallowable purpose during an accounting period so far as they are held during the period—
a
for a purpose that is not a business or other commercial purpose of the company, or
b
for the purpose of activities in respect of which the company is not within the charge to corporation tax.
2
For the purposes of subsection (1)(a) investments are not held for a business or other commercial purpose if they are held directly or indirectly in consequence of, or otherwise in connection with, any arrangements for securing a tax advantage.
3
In subsection (2) “arrangements for securing a tax advantage” means arrangements the main purpose, or one of the main purposes, of which is to secure—
a
the allowance of a deduction (or increased deduction) under section 1219, or
b
any other tax advantage.
4
Any apportionment needed for the purposes of subsection (1) must be made on a just and reasonable basis.
5
In this section—
a
“arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable), and
b
“tax advantage” has the meaning given by F1section 1139 of CTA 2010.